Alluding to the US election and the UK’s vote to leave the European Union, HSBC said 2016 would “be long remembered for its significant and largely unexpected economic and political events”.

“These foreshadowed changes to the established geopolitical and economic relationships that have defined interactions within developed economies and between them and the rest of the world,” said chairman Douglas Flint.

Looking ahead to 2017, the bank said the “outcome of the US election has added to concerns about a rise in protectionism”.

“This has been accentuated in many parts of the world by technological change and income inequality.”

HSBC said that any “amplification of this trend” would lead to a disruption in global trade and affect its traditional line of business.

Image copyrightMatt Cardy

The bank confirmed last year it would keep its European headquarters in London, despite the Brexit vote.

But announcing the results on Tuesday, Mr Flint said the bank’s current planning suggested it may need to relocate some 1,000 roles from London to Paris over the next two years, depending on how negotiations develop.

He added the bank had “broadly all the licences and infrastructure needed to continue to support our clients once the UK leaves the EU”.

‘Digital transformation’

Investors had been expecting a share buyback worth between $2.5bn and $3bn, so were disappointed when HSBC announced a plan to buy back $1bn worth of shares, said Mike Amey, from the giant fund management firm, Pimco.

Investors like share buybacks as they typically boost a company’s share price.

However, Mr Amey added that Tuesday’s decline in HSBC shares should be put in the context of a 50% rise in their value over the past 12 months.

HSBC makes most of its money outside the UK, with Asia accounting for the bulk of its global pre-tax profits.

Earlier this year it revealed plans to shut a further 62 UK bank branches in 2017, as more customers conducted their transactions online. The bank closed 223 UK branches last year.

Group Chief Executive Stuart Gulliver said the bank was investing more than $2bn in “digital transformation initiatives to improve our offer to customers”.

HSBC has been on a cost-cutting drive since 2015, with plans to cut 8,000 jobs in the UK and achieve $5bn in savings.